Surprise: April MBS Returns Best in Over 10 Years

On the heels of earlier data suggesting at least some encouraging trends for investors, it turns out that April was a very good month for some investors in the MBS marketplace -- and the first strong sign of life in a secondary mortgage market that has been all but locked up since the middle of last year.
The proof? Merrill Lynch said that excess returns for MBS over Treasuries were the highest they've been since at least 1997, Reuters reported Friday morning:

Merrill Lynch said the excess return of the MBS index in April was 1.546 percent, the highest one-month result since the company started calculating excess returns in January 1997, Carrie Gray, spokeswoman for the company, said in an e-mail.
The stellar performance was largely due to robust buying from an array of investors, particularly government-sponsored enterprises Fannie Mae and Freddie Mac. Overseas demand from Asia, in particular, also played a pivotal [role], analysts say.

Part of the reason for outsized returns, sources told HW, has as much to do with Treasuries as it does with some resumption of buying activity in the MBS market. Merrill Lynch's bond indexes show, for example, that Treasuries lost 1.7 percent in April -- the first monthly loss since June of last year.

This month inHousingWire magazine

Eight years after we began recognizing women for their influential work in the expanding housing and mortgage finance ecosystem, a traditionally male-dominated field, our Women of Influence list is bigger and better than ever! This year, we honor 85 women who are making lasting achievements in each sector of the housing economy. Read on to learn more about these accomplished women and the strides they are making in their industry segments.

Feature

The financial world at large is experimenting with changing its workforce culture in ways not fathomable 10 years ago. For example, in 2011, the dress code for female workers at UBS came to light with unflattering results. In it, the Swiss bank instructed female employees on not just how to dress and how to smell, but also preached the importance for ladies to apply lotion after taking showers. Fast forward to today and fellow Swiss bank, Credit Suisse has now created an official role to boost equal opportunities and create a fair treatment environment. Has the American mortgage industry made similar progress?

Commentary

The conversation around student loan debt and its economic impact on Millennials, those born from 1980 to 1998, has some questioning whether the future of the American Dream is in jeopardy. The nation’s student loan debt has soared to $1.4 trillion, surpassing credit cards in becoming the largest source of personal debt outside a mortgage.